It Is Gold's Time

By: Robert Waxman | Sun, Jun 3, 2012
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Gold prices are headed to infinity. We all know that; it's just a matter of when. Every fiat currency system that has ever existed has died and gone away. What makes the current one any different? The answer is nothing. Credit has been abused and will exact its price as it has every time before. It is amazing how grand this credit bubble became, but it has ended and gold will tell everyone that. The gold price has finished another nine month consolidation and has convinced many of its uselessness. "You can't eat gold" is one of their favorites; well, you CAN eat stock certificates, but I'll bet they aren't very nourishing, and you can always trade the gold for some food. The most recent action in the precious metals complex is clear and decisive; huge volume on up days when the stock market is tanking tells us the stock sellers believe in gold. The US dollar will no longer hinder gold's progress as it is now a competing currency which will come second until it is worthless.

I have seen the action in gold and after Friday's jump on huge volume I fully expect that the parabolic stage of the gold bull market has begun. I was a huge gold bull in 2002 and many were telling me to shut up about it because hearing about it all the time was annoying. Gold was $300. Now few can afford an ounce. I got bucked off the bull far too early in the last run, but this time is different. $1900 gold represented the top of the second stage of this bull and will quickly be seen as a great entry point. I have read that some prominent hedge funds are gold bulls and George Soros and David Einhorn are NOT followers.

Gold stocks outperformed everything in the great depression and much of the gain occurred in a very short time. Gold prices rising and oil prices falling will put gold mining companies in the driver's seat for earnings growth as profit margins explode higher. Dividend increases and share buybacks will be catalysts for major share price increases. There are and will be few sellers, and the mining stocks will rise with a vengeance from here. This is the last stop on the train to infinity for gold; it will be a swift and smooth ride.

Central banks are buying gold and you should too. They are not going to give up and allow the unavoidable crash and subsequent depression, but they know the consequences and are thus trying to fill their vaults with gold so that they still have say after the fire. It is impossible to know how things will turn out, but from the looks of the latest economic reports it doesn't look good. Unfortunately, I believe deflation and depression are the inevitable manifestation of bad policy and miseducation. Gold's outperformance during hard times is logical and undeniable and very few prosper from it because they don't believe until it is much too late to participate. I have spoken with many wealthy and intelligent people who do not own gold , and when the wealthy begin to chase the price upward it will accelerate like nothing we've ever seen before.

History is filled with episodes like we find ourselves in, and a little gold was never a burden. Get some.

 


 

Author: Robert Waxman

Robert Waxman

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